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Ukraine’s New Fiat Restrictions to Boost Popularity of Crypto, Industry Says

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The Central Bank of Ukraine has adjusted the fixed exchange rate of the national currency against the US dollar and introduced tighter limits on transactions with the hryvnia for citizens. According to a representative of the local crypto sector, these measures are likely to lead to more Ukrainians switching to cryptocurrencies.

Wartime hryvnia limits are expected to increase interest in cryptocurrency

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National Bank of Ukraine (NBU) introduced new rules in response to the changing fundamentals of the country’s economy during the ongoing military conflict with Russia. The monetary authorities devalued the Ukrainian hryvnia against the strong US dollar on Thursday by 25% and set new limits on banking operations with the national currency.

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According to the updated regulations for individuals, effective from July 21, banks can sell non-cash foreign currency to their customers only if the amounts are deposited for a period of at least three months, without the possibility of terminating the contract.

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The ceiling of UAH 50,000 for payment card withdrawals has now been replaced by a weekly limit of UAH 12,500 ($340). Peer-to-peer transfers abroad from cards issued by Ukrainian banks have been reduced from 100,000 hryvnia (about $2,700) to 30,000 hryvnia ($800). And the limit for cross-border payments with hryvnia cards is set at 100,000 per month.

All measures introduced since the beginning of the war are temporary and allow the economy to survive, NBU Governor Kirill Shevchenko assured. However, they seriously affect Ukrainians, especially those millions of citizens of the country who were forced to leave the country and still cannot return.

The latest NBU restrictions may lead to a surge of Ukrainians’ interest in cryptocurrencies, Mikhail Chobanyan, founder of the Ukrainian crypto exchange Kuna, commented for Forklog crypto news. “We expect an increase in turnover and use of cryptocurrencies. In Europe, 100,000 hryvnias is nothing,” the entrepreneur added.

Chobanyan also noted that the new limits will interfere with the work of volunteers, since most of the humanitarian assistance is purchased with cards issued by Ukrainian banks and owned by individuals. “Now we will fully transfer these flows to cryptocurrency,” Chobanyan said, calling the central bank’s policy aggressive and warning that Ukrainian banks and the state budget would be the losers.

Do you agree that many Ukrainians will turn to crypto amid tightening restrictions on fiat transactions? Tell us in the comments section below.

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Credit : news.bitcoin.com

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